Nexterra Energy of Vancouver has received $2.7 million CDN from the Canadian government to develop a demonstration of replacing natural gas used in the pulp and paper industry with synthetic gas made from waste wood chips.

The funding will be used to support the demonstration of a full-scale biomass gasification system designed to convert wood waste into synthetic gas. The "syngas" is to displace the natural gas currently used to fire lime kilns in kraft pulp mills.

The work is an extension of a previously announced agreement between Nexterra, Weyerhaeuser's Kamloops Cellulose Fibers pulp mill and Paprican, the Pulp and Paper Research Institute of Canada.

Successful implementation of the new gasification system at the Kamloops Cellulose Fibers plant has the potential to reduce natural gas consumption by more than 500,000 gigajoules (GJ) per year, the equivalent amount of natural gas needed to heat 4,000 residential homes. This in turn can save the mill several million dollars a year and reduce greenhouse gas emissions by 25,000 tonnes per year, Nexterra said. The total cost of the project, including the demonstration phase, is expected to be more than $10 million CDN.

"This work will result in a cost effective, new standard of clean energy technology that will help us reduce our manufacturing costs and reduce our carbon emissions," said Bill Adams, Manufacturing Services Manager at Kamloops Cellulose Fibers.

Kamloops Cellulose Fibers is one of the largest mills in North America, with an annual capacity of 480,000 tonnes. The mill is located in the southern interior of B.C.

According to experts, the lime kiln is one of the last remaining pulp and paper applications where fossil fuel has historically been the only technically feasible source of heat.

North America's pulp and paper industry consumes 900 trillion Btu of natural gas and fuel oil each year at a cost of US $8.0 billion. There are 150 kraft pulp mills in North America, each consuming millions of dollars of natural gas or fuel oil in their lime kilns.